Five Critical Success Factors in Becoming Easier to do Business With
Updated: Oct 16, 2019
If you asked your customers, “How easy is it to do business with us?” what would they say? If you’re like many other companies, they’ll probably say, “Not very.” If you asked customers to compare you with Amazon or Lyft or USAA, they might say, “Not at all!”
How do we make it easier for our customers to buy from us?
Isn’t it just about improving the customer experience?
Turns out, the answer is “No.” Ease of Doing Business trumps CX. As the seminal article “Bad is Stronger than Good” points out, “bad emotions, events and feedback have more impact than good ones. Bad impressions are quicker to form and more resistant to disconfirmation than good ones.” The badness of high customer effort, which ordinarily transcends multiple customer touchpoints, is not easily offset by the goodness of CX improvements, which tend to affect very specific moments. CX is meant to be all-encompassing, but in practice it almost never is. The persistence of rampant Ease of Doing Business challenges in virtually every organization we encounter is proof of that, especially given the enormous push for CX improvements over the past 10 years.
Ease of Doing Business is on the lips of many CEOs and Board members, and rightly so. The promise of reduced costs is huge. Reducing customer effort can save 37% in operating expenses and can induce customers to spend 88% more. Customer effort impairs revenue growth and destroys profits. Ease of Doing Business is the single most important thing for companies to focus on. In earlier articles we listed some of the most common drivers of Ease of Doing Business, but there is a massive disconnect in buyer and seller perceptions of which drivers are really impacting a given situation.
We’ve watched businesses attempt to become customer-centric for the past decade. Some have succeeded wildly. Others have failed miserably. In an effort to understand why we interviewed some of the most successful CMOs, CSOs, CCOs, etc. to learn what they did to shape customer strategy.
Based on these interviews and our own experiences, we have developed a Customer Performance Framework. It contains seven leading indicators. Executives who improve these guarantee increased revenue, profits, and job performance. Customer Effort, or Ease of Doing Business, is the #1 most important leading indicator. The Framework also includes 60+ programs that an executive can deploy against those seven leading indicators.
There are five critical steps you should take as you start down the path of making yourself easier to do business with:
Establish Ease of Doing Business Metrics
Understand Critical Drivers of Ease of Doing Business
Develop a Baseline Perception
Identify Ease of Doing Business Hotspots
Establish a Customer Effort Tag Team
Let’s look at these one at a time:
1. Establish Ease of Doing Business Metrics
The most critical first step is to develop a set of metrics that measure overall Ease of Doing Business as well as transactional customer effort. We’ve found that many CMOs and CCOs are measuring NPS and CSAT, reading verbatims, polling sales teams, etc. to back into identifying processes that might be causing friction for customers. However, very few are formally measuring Ease of Doing Business or customer effort effectively.
A large energy distribution company in the US recently began measuring NPS. However, their customers are largely captive—they may only gain or lose one new customer in any given year. A “willingness to recommend” or other loyalty metric isn’t actually going to inform strategy. However, becoming Easier to do Business With is something that can minimize complaints, rescues, escalations, and complaints to regulatory bodies. And it will do more to protect profits and prevent that one lost customer than most any other activity.
Metrics have to be informed by customers. Our research shows there is zero overlap in the top three things we as sellers think are important to fix vs. what buyers believe is important. Metrics have to help us accurately assess the key drivers from our customers' perspectives. This is the only way we can ensure we’re focused on impactful initiatives. Furthermore, we need to balance customer desires with strategic imperatives and costs to deliver.
We recommend creating an overall Ease of Doing Business metric rolled up from other measures, as well as a transactional Customer Effort Score.
2. Understand Critical Drivers of Ease of Doing Business
What is it that your customers say makes you hard to do business with? Is it the sales process? Contracting? Collaboration? On-boarding? We have identified the 10 most common drivers of Ease of Doing Business. We would love to have you share your drivers and help us expand our repository of benchmarks. Can you take 3 minutes and share?
It is critical to establish these drivers using customer input. That’s the whole point of the exercise. Socialize them within your company and use these as a foundation for your Ease of Doing Business improvements.
3. Develop a Baseline Perception
At the core of any good change initiative is a solid baseline. This holds true for assessing Ease of Doing Business. It must measure both internal and customer perceptions. We're using a diagnostic tool that measures perceptions and performance in eight broad categories of our Customer Performance Framework. This diagnostic is completed by specifically targeted line of business leaders, front-line employees, and key customers. The results are rolled up into an overall Ease of Doing Business Score.
Front-line employees often have a very good sense of where customer frustration is the highest. We often find alignment in perceptions between these employees and customers—and then find gaps in perceptions between executives and those same customers. If carefully handled, bringing clarity to these different points of view can be a powerful motivator for change.
The overall Ease of Doing Business score should align with each of the critical drivers to allow for granular measurement of improvement.
4. Identify Ease of Doing Business Hotspots
Customer effort originated in the call center, because customers were 4x more likely to leave those interactions in a disloyal state.
That is no longer enough. Ease of Doing Business has to be measured across the customer journey.
The root causes of increased effort can be found well upstream of the call center. A major insurance company experienced a massive increase in call volume within days of mailing monthly statements. Frustrations were extremely high. This surge of calls was caused by confusing billing statements accompanied by generic and irrelevant inserts.
Creating an Ease of Doing Business Hotspot Map can be very useful in pinpointing customer effort hotspots like these and prioritizing solutions. Evaluate each customer touchpoint and customer-impacting process through the lens of Ease of Doing Business:
Perceived ease: how hard do customers perceive the job to be done?
Actual ease: how much actual time is spent performing the job?
Competitive ease: how hard do customers perceive it is to do the same job with competitors?
Returned value: How much value does touchpoint improvement yield?
Even though a job might not take long, it can be perceived to be high effort. Filling out a supplier form in the vendor’s portal might take little time. But if it is the fifth time your customer has had to re-enter information it becomes high-effort and a source of friction. This friction is additive across many other interactions.
5. Establish a Customer Effort Tag Team
Customer effort is typically a result of decisions and processes far upstream from where customers say, “You’re hard to do business with!” A single executive rarely has complete span of control over all the drivers of Ease of Doing Business. Therefore, successful customer executives create a cross-functional team. They ensure the team has the explicit permission to examine all processes across the organization.
While at Oracle, we orchestrated cross-functional teams to address the top 10 sources of customer friction. Our own team served as consultants to passionate employees from business units that owned the sources of friction. Members were trained and emboldened to make change. Group membership changed based on the initiatives underway.
The Tag Team provides leverage as they work within their respective organizations to address the biggest obstacles to Ease of Doing Business. As well, they help their organizations adhere to standard best practices along the drivers of Ease of Doing Business.
Ease of Doing Business is one of the most important (and overlooked) components of business success. If you’re hard to do business with, customers don’t care that you have made point-in-time or transactional CX improvements.
Armed with the metrics, critical drivers, a baseline customer perception, and Ease of Doing Business hotspots, you and your team have all you need to establish priorities and create an action plan to engage employees in resolving real issues. We just wrote about how critical it is to create a business case to demonstrate and then measure value—even for something as seemingly obvious as Ease of Doing Business.
If you Want Help
If you’d like assistance in developing these and additional capabilities, we’ve created an Ease of Doing Business Accelerator. You can attend a public accelerator and benefit from cross-pollination with other non-competing companies or you can bring it in-house to work exclusively on your own strategies.
If you’d like to learn more or join us at the accelerator, please select a convenient time for a brief call.
Jeb Dasteel, Dasteel Consulting (and former CCO, Oracle)
Curtis Bingham, Founder & CEO, Chief Customer Officer Council